Industry, Fans Turn Out to Hear Flynt/Klein Keynote at AEE

LAS VEGAS—In 2014, Larry Flynt, founder and owner of the vast Hustler/LFP empire, will celebrate his 40th anniversary in the adult business, so why not get the jump on things and have the keynote address at the AVN Adult Entertainment Expo delivered by than his daughter (and executive vice president of LFP, Inc.), Theresa Flynt, and the president of the Hustler empire, Michael Klein?

The event was not so much a speech, however, as a rapid-fire series of questions and answers led by the session's moderator, AVN Senior Editor Tom Hymes, who probed the guests about everything from their beginnings with the company to their relationships with Larry Flynt himself, to the future of the Hustler's brand in commercial areas such as Hustler Video, Hustler magazines, Hustler Broadcasting, the Hustler Hollywood stores and several other venues—and the audience of more than 200 ate it up.

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Theresa Flynt revealed that she'd begun working for her father in about 1994 in the magazine division, overseeing everything from magazine content to making sure it got to the printer on time, but she wasn't sure she wanted to make it her life's work. However, when Larry told her of his plans to open a Hustler-branded story in Hollywood to see Hustler products—videos, apparel, novelties and more—she told him she'd love to run the store.

"The challenge of creating a shopping experience for couples," she said, "the challenge he gave me—he said, 'I would love for a school teacher to feel comfortable to come in and buy a vibrator'—and I thought, 'I want to accept that challenge, and I want to do that. I want to build a store that people feel comfortable to go into.'"

Theresa now oversees the 14 Hustler Hollywood stores (with more store projects currently under discussion), but she also helped set up both the Hustler Novelty and Hustler Apparel divisions, and also deals daily with everything from accounting to human resources for the 1,400 LFP employees.

Klein, a veteran of the mainstream broadcasting industry, started with the company in 2004, as the executive vice president of LFP Broadcasting, an entity which he created.

"I met Larry because I was talking to some people from his company," Klein explained, "and I told him he should get into broadcasting, that he has a terrific brand and terrific content, and instead of selling it to everybody else, he should be using that brand to take advantage, especially with cable and VOD, going out in the marketplace ... He said, 'When do you want to start?' And he basically offered me the job while I was sitting in his office."

Klein told the audience that the Hustler/LFP empire consists currently of 52 different companies including those involved in publishing, broadcasting, internet, video, mobile products, novelties, apparel, licensing, retail stores, Hustler Clubs (in which Flynt partners with Harry Mohney of DejaVu) and the Hustler Casino, which Flynt bought in a bankruptcy sale and turned it into the most successful part of his business.

"I've always looked at it like, in the '60s, Hustler was strip clubs; in the '70s we became a magazine; in the '80s we added in magazine distribution; and in the '90s we added in video and internet; and the 2000s we added in stores," Theresa explained, "so it's like an evolution, in that every decade, we add in something big and something more."

Klein traced Hustler's ability to grow to the fact that it's a privately held company, and thus it's easier to consider new ideas.

"We get approached probably every week with some new idea, new concept, new thing," Klein said. "There always are some gems you find in there ... We'll sit down with Larry, and you know, he is a risk-taker, and he's willing to take a gamble on something if he thinks he can make money off of it."

"I've always felt like he has the Midas touch," Theresa added. "Everything he touches turns to gold; it really does."

"I really feel that we have two brands, and I think that 'Larry Flynt' is a brand of its own, and then 'Hustler,'" she later remarked. "I think we have Larry Flynt who is this civil libertarian, the icon, thd author, the publisher, the freedom fighter—we have that brand and then we have Hustler, and that is carrying over into mainstream with the clothes and the casino. ... To me, 'Hustler' says 'rebel,' so whether you're a 16-year-old wearing a Hustler shirt or a 60-year-old who was subscribing in the '70s, it's somebody who has that rebel attitude."

Klein pointed out that Larry makes himself aware of everything that goes on at his various companies on a daily basis, though his main areas of focus have been the publishing segment of the business as well as the casino and the retail stores—and that generally means his top staff put in lots of hours.

"Theresa and I interact pretty much daily," Klein said. "When you work for Larry, you work seven days per week; there is no Saturday or Sunday off... My wife's kind of gotten used to the 7 a.m. Sunday phone calls."

"He works 24/7," Theresa stated, "and that's one of the things about the way he raised me; he said, 'You don't get anywhere in life working a 40-hour work week. You want something, you have to give it everything you have.' And he's living proof: He's going to be 70 this year and he works 24/7. No pension or retiring."

Hymes pointed out that Flynt is a brand in himself, and Klein noted that at times that he (Klein) has tried to get a foot in the door with mainstream companies, it's Larry who's paved the way by offering to have lunch with the company executives, regaling them with stories of his life, then turning the meeting over to Klein.

The discussion then turned to some of Hustler's products. Klein stated that the company releases four or five movies per month, all of which currently have 3D versions, and that he keeps the mobile and internet uses for the content in mind.

Theresa told the audience that Hustler Hollywood opened four stores last year—Minneapolis, Chicago, Columbus and Cincinnati—and that she's looking at about a dozen cities for possible future locations.

"The retail stores do great; they're like a date destination," she said. "No matter what you can get on the internet, a girl wants to feel the lace on a pair of panties and see the sex toy in person and see it demonstrated and know how it works. I think stores will always exist because people want to go there."

The discussion then turned to the adult video business in general, with Klein joking that, "In a couple of years, there'll be two companies left: Hustler and Manwin," with Theresa adding that at Hustler, when it comes to new products, "It's all about the team. ... It's a collaboration; that's what Michael's saying. We have weekly and monthly meetings where we meet as a group. Two heads are better than one, and four better than two—you keep going, but the vision comes from the boss; he's there every day, breathing down our necks."

She noted, in response to a question from Hymes, that indeed, the market for videos and sex toys is "saturated," but "As everyone here knows, a lot of the video companies have come out with toy lines because they're trying to make up for the lost revenue, so it's saturated. It's hard on the buyers, because they have to go through and weed through and pick out the best."

Piracy was the next topic, and Klein assured the crowd that Hustler was very involved in the fight against piracy, not only of videos but also of toys, and that Hustler has joined with other companies to file lawsuits against infringing sites, has filed DMC notices of its own—"I think we take down something 100,000 scenes a month"—and he feels that the joint efforts are working, to the point that some infringing tube sites have come around to the idea of monetizing the content they previously stole.

"Today, someone came to me and said, 'By the way, I was over in China and I went to a store and ... I want to say what a great job you're doing with your Hustler novelties," and the store, he showed me the window display, and none of it was our product," Klein recounted. "It was all counterfeit product with Hustler's name on it. It literally had the Hustler name all over it. It was a whole window display in a major store over there, a gigantic display, with Hustler banners and products, you know, vibrators and such, the Hustler name, and none of it was ours."

The discussion then delved further into legal issues, with Klein noting the importance of companies working together to protect their content. When Hymes brought up the recent Los Angeles City Council vote to enact a mandatory condom ordinance, Klein assured that Hustler's attorneys were looking carefully at the issue, and that the company was already involved in appealing the $14,000 fine levied by Cal/OSHA for releasing videos that did not use condoms during sex scenes.

"Larry's line last week was, 'A movie with condoms is like masturbating with a glove on,'" Klein recounted. "Consumers don't want to see them in the films, it doesn't sell, and this industry has proper testing, the proper safety measures are in place to insure performers are protected, and we shouldn't have the government trying to regulate how we operate our business."

"You're selling a fantasy," Theresa noted.

Hymes then asked Theresa to tell the audience something about Larry Flynt that no one else knows, and she dropped a blockbuster.

"He's one of the most open and direct people you could ever meet in your life," she said. "He has absolutely zero secrets so that I can tell you, if you have a secret, don't tell him; he has the biggest mouth ever. He can't keep a secret to save his life. ... When I was a teenager and started my period, within five minutes of when I told him, everybody knew."

"I always knew what my father did," she'd said earlier. "I knew he was famous for publishing nude photos of women, and he never hid anything, and I think that's why I have a very healthy attitude in life. He's very direct, honest and has no secrets, and that's really inspiring. ... There's only one Larry Flynt. I'm proud that he's my father and I hope I'm a little bit like him, and I aspire to be more like him every day."

A brief question period followed, with Theresa stressing the importance of brick-and-mortar stores because "people like to touch what they're buying," and Klein noting that even in the current recession, "Larry jokes, 'You know, people might not have money for food or clothing or cars but they still have money for a dildo.'"

The session went a bit over its allotted one-hour time slot, but no one in the audience minded; they were simply enthralled by the tale of the growth of the Hustler empire, and hopefully learned some things they could apply to their own businesses.